Economy weathers Katrina’s aftereffect - East Valley Tribune: Business

Economy weathers Katrina’s aftereffect

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Posted: Saturday, October 8, 2005 6:42 am | Updated: 9:56 am, Fri Oct 7, 2011.

WASHINGTON - Hurricane Katrina bruised the economy in September, causing the first nationwide job loss in two years, but the damage wasn’t as awful as many had feared.

Payrolls fell by 35,000, with jobs in retailing, lodging, bars, restaurants and leisure pursuits such as gambling taking a hit. The unemployment rate climbed to 5.1 percent from a four-year low of 4.9 percent in August.

The snapshot, released by the Labor Department on Friday, provided the most extensive picture of the jobs climate in the aftermath of the deadly and destructive Katrina, the costliest natural disaster in U.S. history. The impact of the next hurricane, Rita, was ‘‘negligible’’ on the latest figures, the department said.

To be sure, the loss of lives and livelihoods in the ravaged regions is devastating. But Friday’s report suggested overall economic activity and national employment will withstand the trauma and not thrust the economy into recession.

‘‘The U.S. job market was not as severely impacted by the hurricanes as initially feared. Outside the affected region, it would appear that job growth remained fairly solid,’’ which helped temper job losses, said Stuart Hoffman, chief economist at PNC Financial Services Group.

Before the report was released, economists were forecasting a loss of at least 150,000 jobs. The rise in the unemployment rate to 5.1 percent, the highest since May, matched economists’ expectations. ‘‘This indicates that the job market is holding together pretty well,’’ said Mark Zandi, chief economist at

Excluding the disaster areas, employment would have increased ‘‘in line’’ with the more than 190,000 jobs generated each month over the past year, said Philip Rones, deputy commissioner of the Bureau of Labor Statistics. Job losses from Katrina were around 230,000 for the month, economists estimated.

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